Basics of Marine Insurance.
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Basics of Marine Insurance.

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Marine Insurance is considered to be a tough nut to crack. This slide presentation would give the viewers some basic aspects of Marine Insurance. Suggestions and comments are welcome.

Marine Insurance is considered to be a tough nut to crack. This slide presentation would give the viewers some basic aspects of Marine Insurance. Suggestions and comments are welcome.

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  • 1. Compiled by S. M.Gupta 2
  • 2. INTRODUCTION INSURANCE CONNECTED WITH THE RISKS OF TRANSPORTATION OF GOODS, IS ONE OF THE OLDEST AND MOST IMPORTANT FORMS OF INSURANCE THE VALUE OF GOODS SHIPPED BY THE BUSINESS FIRMS EACH YEAR COST BILLIONS OF RUPEES THESE GOODS ARE EXPOSED TO DAMAGE OR LOSS FROM NUMEROUS PERILS ASSOCIATED WITH TRANSPORTATION THESE GOODS CAN BE PROTECTED BY MARINE INSURANCE CONTRACTS. Compiled by S. M.Gupta 3
  • 3. INTRODUCTION IT IS AN IMPORTANT ELEMENT OF THE GENERAL INSURANCE INDUSTRY IT ESSENTIALLY PROVIDES COVER FOR THE LOSSES SUFFERED DUE TO MARINE PERILS IN INDIA, THE MARINE INSURANCE IS REGULATED BY: THE INDIAN ‘MARITIME INSURANCE ACT, 1963’. WHICH IS BASED ON THE ORIGINAL ‘MARINE INSURANCE ACT, 1906. OF U.K. Compiled by S. M.Gupta 4
  • 4. HISTORY OF MARINE INSURANCE MARINE INSURANCE AS WE KNOW IT TODAY, CAN BE DESCRIBED AS MOTHER OF ALL INSURANCES IT IS BELIEVED TO HAVE ORIGINATED IN ENGLAND OWING TO THE FREQUENT MOVEMENT OF SHIPS OVER HIGH SEAS FOR COMMERCE AND TRADE IN INDIA, MARINE INSURANCE HAS BEEN IN VOGUE FOR SEVERAL CENTURIES. Compiled by S. M.Gupta 5
  • 5. HISTORY OF MARINE INSURANCE PRIOR TO THE DEVELOPMENT OF MARINE INSURANCE, THE PEOPLE ACROSS THE WORLD, HAD A SYSTEM OF: POOLING THEIR CONTRIBUTIONS SO THAT IF ANY ONE OF THEM SUFFERS LOSS DURING VOYAGE HE WOULD BE COMPENSATED FROM THE POOL. TODAY MARINE INSURANCE HAS ASSUMED A VAST DIMENSIONS DUE TO EVER EXPANDING TRADE ACROSS THE GLOBE. Compiled by S. M.Gupta 6
  • 6. HISTORY OF MARINE INSURANCE IT INVOLVES LARGE SHIPPING COMPANIES THAT REQUIRE PROTECTION: NOT ONLY FOR THEIR COSTLY FLEET AGAINST THE PERILS OF THE SEA, BUT ALSO TO THE CARGO BEING CARRIED IN EACH OF THESE SHIPS. THE VALUE OF EACH SHIP AND THE CARGO CARRIED THEREIN, MAY BE COSTING MILLIONS OF RUPEES TO THE OWNERS. Compiled by S. M.Gupta 7
  • 7. World’s biggest Passenger-ship ‘MS Freedom of the Seas’ 4300 passenger Capacity Inside Compiled by S. M.Gupta 8
  • 8. World’s biggest Passenger-ship Compiled by S. M.Gupta 9
  • 9. MARINE INSURANCE MARKET LLOYD’S, A CORPORATE ESTABLISHED IN LONDON, IS THE BIGGEST CENTRE FOR MARINE INSURANCE IN THE WORLD LLOYD’S WAS A COFFEE HOUSE FREQUENTED BY THE TRADESMEN, SHIP- OWNERS AND OTHERS THE COFFEE HOUSE BECAME THE MEETING GROUND FOR: BROKERS, INSURERS AND SHIP OWNERS FOR NEGOTIATING THEIR BUSINESS. Compiled by S. M.Gupta 10
  • 10. LLOYD’S COFFEE HOUSE AT THE COFFEE HOUSE THEY WOULD DISCUSS VARIOUS ASPECTS OF THE SHIPPING BUSINESS INCLUDING CARGO AND SHIP INSURANCE AND: ULTIMATELY IT STARTED TRANSACTING MARINE INSURANCE IN A BIG WAY. WHEN THE BRITISH OCEAN LINER ‘TITANIC’ WHICH SANK IN 1912, DURING HER MAIDEN VOYAGE: WAS INSURED BY LLOYD’S WHO PAID AN INSURANCE CLAIM OF ONE MILLION US $. Compiled by S. M.Gupta 11
  • 11. Compiled by S. M.Gupta 12
  • 12. MARINE INSURANCE IN INDIA THERE IS EVIDENCE THAT THE MARINE INSURANCE WAS PRESENT IN SOME FORM OR THE OTHER IN INDIA SINCE A VERY LONG TIME. IN EARLIER DAYS TRAVELERS BY SEA WERE PARTICULARLY AFRAID OF: LOSING THEIR VESSELS AND MERCHANDISE BECAUSE OF: PIRACY ON THE OPEN SEAS. Compiled by S. M.Gupta 13
  • 13. SUBJECT MATTER OF MARINE INSURANCE THE INSURANCE IN THE CURRENT SCENARIO, HOWEVER IS, MUCH MORE THEN, WHAT WAS ENVISAGED EARLIER IT IS NOW REQUIRED TO PROTECT THE INTEREST OF: THE OWNER OF THE SHIP OWNER OF THE CARGO THE PERSON INTERESTED IN FREIGHT FOR LIABILITIES AND IN RESPECT OF FINES IMPOSED FOR VARIOUS REASONS. Compiled by S. M.Gupta 14
  • 14. SUBJECT MATTER OF MARINE INSURANCE IN CASE THE SHIP CARRYING THE CARGO SINKS: THE SHIP WILL BE LOST ALONG WITH: THE CARGO THE INCOME THAT THE CARGO WOULD HAVE GENERATED WOULD ALSO BE LOST IT MAY ALSO DAMAGE THIRD PARTY PROPERTY THIRD PARTY INJURIES OR DEATH. Compiled by S. M.Gupta 15
  • 15. CLASSIFICATION OF MARINE INSURANCE BASED ON THE FACTS STATED EARLIER, MARINE INSURANCE CAN BE CLASSIFIED INTO FOUR BROADER CATEGORIES I.E: HULL INSURANCE CARGO INSURANCE FREIGHT INSURANCE AND LIABILITY INSURANCE HOWEVER OUR ENDEAVOUR WOULD BE LIMITED TO DISCUSSING THE ‘MARINE CARGO INSURANCE’ ONLY. Compiled by S. M.Gupta 16
  • 16. Types of ‘Hull’ Compiled by S. M.Gupta 17
  • 17. CARGO INSURANCE ‘CARGO’ REFERS TO: THE GOODS AND COMMODITIES CARRIED DURING TRANSIT BY: RAIL, ROAD, SEA OR AIR FROM ONE PLACE TO ANOTHER. THE ‘CARGO’ TRANSPORTED BY SEA IS SUBJECT TO MANIFOLD RISKS SUCH AS: LOSS OR DAMAGE AT THE PORT AND LOSS OR DAMAGE DURING THE VOYAGE. Compiled by S. M.Gupta 18
  • 18. WORLD’S BIGGEST CARGO LINERS Compiled by S. M.Gupta 19
  • 19. CARGO INSURANCE ‘MARINE CARGO INSURANCE’ PROVIDES THE INSURANCE COVER IN RESPECT OF: LOSS OF OR DAMAGE TO CARGO DURING TRANSIT BY: RAIL, ROAD, SEA OR AIR. THUS ‘MARINE CARGO INSURANCE’ COVERS THE FOLLOWING: EXPORT AND IMPORT SHIPMENTS BY OCEAN TRANSSHIPMENTS SHIPMENT BY INLAND VESSELS CONSIGNMENTS SENT BY RAIL, ROAD, AIR & ARTICLES SENT BY POST. Compiled by S. M.Gupta 20
  • 20. WORLD’S BIGGEST PLANE ‘AIRBUS A380’ - 555 Passengers Compiled by S. M.Gupta 21
  • 21. CARGO INSURANCE ‘MARINE CARGO INSURANCE’ COVERS THE SHIPPER OF THE GOODS, IF THE GOODS ARE DAMAGED OR LOST DURING TRANSIT THE ‘CARGO’ POLICY COVERS THE RISKS ASSOCIATED WITH THE TRANSSHIPMENT OF GOODS THE POLICY COULD BE ISSUED TO COVER A SINGLE SHIPMENT OR IF REGULAR SHIPMENTS ARE MADE: AN ‘OPEN POLICY’ CAN BE ISSUED WHICH INSURES THE GOODS/ CARGO AUTOMATICALLY WHENEVER A SHIPMENT IS MADE. Compiled by S. M.Gupta 22
  • 22. DEFINITION OF MARINE INSURANCE MARINE INSURANCE IS A CONTRACT UNDER WHICH THE INSURER UNDERTAKES TO INDEMNIFY THE INSURED: IN THE MANNER AND TO THE EXTENT THEREBY AGREED AGAINST MARINE LOSSES, INCIDENTAL TO MARINE ADVENTURES. IT MAY BE DEFINED AS A FORM OF INSURANCE COVERING LOSS OR DAMAGE TO: ‘VESSELS’ OR TO ‘CARGO’ DURING Compiled by S. M.Gupta 23 TRANSPORTATION.
  • 23. FEATURES OF MARINE INSURANCE IT IS BASED ON ‘UTMOST GOOD FAITH’ I.E. BOTH THE INSURED AND THE INSURER’S MUST DISCLOSE: EVERYTHING WHICH IS IN THEIR KNOWLEDGE AND CAN AFFECT THE CONTRACT OF INSURANCE. IT IS A CONTRACT OF ‘INDEMNITY’: THE INSURED IS ENTITLED TO RECOVER ONLY THE ACTUAL AMOUNT OF LOSS FROM THE INSURER. Compiled by S. M.Gupta 24
  • 24. INSURABLE INTEREST ‘INSURABLE INTEREST’ IN THE SUBJECT MATTER INSURED ‘MUST EXIST AT THE TIME OF THE LOSS’ IT NEED NOT EXIST WHEN THE INSURANCE POLICY WAS TAKEN UNDER MARINE INSURANCE, THE FOLLOWING PERSONS WOULD DEEMED TO HAVE ‘INSURABLE INTEREST’: Compiled by S. M.Gupta 25
  • 25. INSURABLE INTEREST THE OWNER OF THE SHIP THE OWNER OF THE CARGO A CREDITOR WHO HAS ADVANCED MONEY ON THE SECURITY OF THE SHIP OR CARGO THE MORTGAGOR AND MORTGAGEE THE MASTER AND CREW OF THE SHIP HAVE ‘INSURABLE INTEREST’ IN RESPECT OF: THEIR WAGES AND IN CASE OF ADVANCE FREIGHT: THE PERSON ADVANCING THE FREIGHT HAS AN ‘INSURABLE INTEREST’ IF SUCH FREIGHT IS NOT REPAYABLE IN CASE OF LOSS. Compiled by S. M.Gupta 26
  • 26. WARRANTIES A ‘WARRANTY’ IS A PROMISE BY THE ASSURED TO THE UNDERWRITER THAT SOMETHING SHALL OR SHALL NOT BE DONE OR CERTAIN OF AFFAIRS DOES OR DOES NOT ARISE A ‘WARRANTY’ MUST BE AND LITERALLY COMPLIED WITH, AS OTHERWISE THE INSURER MAY AVOID ALL LIABILITY, FROM THE DATE OF BREACH ‘WARRANTY’ IS IN EFFECT A ‘SAFETY VALVE’ OF THE INSURER’S. Compiled by S. M.Gupta 27
  • 27. TYPES OF WARRANTIES WARRANTIES ARE OF TWO TYPES I.E. ‘EXPRESS WARRANTY’ AND ‘IMPLIED WARRANTY’. AS EXPLAINED EARLIER, BOTH OF THESE WARRANTIES ARE TO BE LITERALLY COMPLIED WITH, BY THE INSURED THE EXAMPLES OF THESE WARRANTIES ARE….. Compiled by S. M.Gupta 28
  • 28. EXPRESSED WARRANTIES ‘EXPRESSED WARRANTIES’: THESE ARE APPEARING IN THE POLICY ITSELF AND NEEDS TO BE COMPLIED WITH. FOR EXAMPLE: WARRANTED PACKED IN NEW GUNNY BAGS WARRANTED NEW DRUMS WARRANTED PROFESSIONALLY PACKED WARRANTED SAILING WITHIN SEVEN DAYS WARRANTED SHIPPED UNDER DECK WARRANTED SURVEYED BEFORE SHIPPING ETC. Compiled by S. M.Gupta 29
  • 29. IMPLIED WARRANTIES • ‘IMPLIED WARRANTIES’: THESE ARE NOT EXPRESSED BUT IMPLIED AND ARE THEREFORE TERMED ‘IMPLIED WARRANTIES’. FOR EXAMPLE: SEAWORTHINESS OF THE VESSEL AT THE COMMENCEMENT OF THE VOYAGE AND LEGALITY OF THE ADVENTURE. IN THE VOYAGE POLICY ON GOODS, THERE IS NO IMPLIED WARRANTY THAT THE GOODS INSURED ARE SEAWORTHY. Compiled by S. M.Gupta 30
  • 30. SUBROGATION/ CONTRIBUTION THE TERMS ‘SUBROGATION’ AND ‘CONTRIBUTION’ ARE COROLLARY TO THE PRINCIPLE OF INDEMNITY. THEY APPLIES TO POLICIES, WHICH ARE CONTRACTS OF INDEMNITY THE PURPOSE OF BOTH OF THESE ARE, TO ENSURE THAT THE ASSURED SHALL NOT MAKE PROFIT OUT OF A LOSS, EITHER WHOLLY OR PARTLY, FROM ANOTHER SOURCE. Compiled by S. M.Gupta 31
  • 31. MEASUREMENT OF SUBROGATION THERE IS A DISTINCTION BETWEEN SUBROGATION RIGHTS UNDER ‘TOTAL LOSS’ CASES AND ‘PARTIAL LOSS’ CASES. UNDER ‘TOTAL LOSS’, THE INSURER IS ENTITLED TO TAKE OVER WHAT EVER MAY REMAIN OF THE SUBJECT MATTER, AFTER PAYMENT, WHEREAS IN CASE OF ‘PARTIAL LOSS’, SUBROGATION IS TO THE EXTENT OF LOSS PAID, EXCESS RECOVERY IF ANY, IS TO BE DISBURSED TO THE INSURED. Compiled by S. M.Gupta 32
  • 32. PROXIMATE CAUSE ‘PROXIMATE CAUSE’ : IS THE ACTIVE, EFFICIENT CAUSE THAT SETS IN MOTION A TRAIN OF EVENTS WHICH BRINGS ABOUT A RESULT, WITHOUT THE INTERVENTION OF ANY FORCE STARTING AND WORKING ACTIVELY FROM A NEW AND INDEPENDENT SOURCE. INSURER’S ARE LIABLE ONLY, IF AN INSURED PERIL IS THE ‘PROXIMATE CAUSE’ OF THE LOSS. Compiled by S. M.Gupta 33
  • 33. MEANING OF MARINE PERILS ‘MARITIME PERILS’ UNDER LAW IS DEFINED AS: THE FORTUITOUS (AN ELEMENT OF CHANCE OR ILL LUCK) ACCIDENTS OR CASUALTIES OF THE SEA WITHOUT THE WILLFUL INTERVENTION OF HUMAN AGENCY THE PERILS ARE INCIDENTAL TO THE SEA JOURNEY AND THAT ARISES IN CONSEQUENCE OF THE SEA JOURNEY. Compiled by S. M.Gupta 34
  • 34. INSURED PERILS SOME OF THE INSURED PERILS ARE: FIRE, EXPLOSION BREAKAGE ACCIDENT DERAILMENT OF CONVEYANCE THEFT PILFERAGE NON-DELIVERY JETTISON….. Compiled by S. M.Gupta 35
  • 35. ‘Wilhelm Gustloff’ SINKING, the biggest Maritime disaster in the history. About 9,400 persons were killed in this disaster in 1945. Compiled by S. M.Gupta 36
  • 36. INSURED PERILS COLLISION OF ONE SHIP WITH ANOTHER SHIP/ AGAINST ROCKS BURNING AND SINKING OF THE SHIP SPOILAGE OF CARGO FROM SEA WATER, MUTINY, PIRACY OR WILLFUL DESTRUCTION OF THE SHIP AND CARGO BY: THE MASTER (CAPTAIN) OF THE SHIP OR THE CREW. Compiled by S. M.Gupta 37
  • 37. Typical Marine Loss of Hull Compiled by S. M.Gupta 38
  • 38. UNINSURED PERILS SOME OF THE UNINSURED PERILS ARE: ORDINARY LEAKAGE, ORDINARY LOSS IN VOLUME OR WEIGHTS OR ORDINARY WEAR & TEAR OF THE SUBJECT-MATTER INSURED LOSS OR DAMAGE CAUSED BY INSUFFICIENCY OR UNSUITABILITY OF PACKING INHERENT VICE….. Compiled by S. M.Gupta 39
  • 39. UNINSURED PERILS DAMAGES CAUSED WITHOUT THE INTERVENTION OF ANY EXTERNAL CAUSE WILLFUL MISCONDUCT OF THE ASSURED LOSS OR DAMAGE ARISING OUT OF INSOLVENCY OR FINANCIAL DEFAULT OF THE OWNERS OR OPERATORS OF THE VESSEL LOSS, DAMAGE OR EXPENSE ARISING OUT FROM THE USE OF ANY WEAPON OF WAR EMPLOYING: ATOMIC OR NUCLEAR FISSION/ FUSION OR OTHER LIKE Compiled by S. M.Gupta 40 RADIOACTIVE REACTION/ FORCE.
  • 40. TYPES OF MARINE POLICY MARINE POLICIES ARE KNOWN BY DIFFERENT NAMES, ACCORDING TO THE MANNER OF THEIR EXECUTION, OR THE RISK THEY COVER SUCH AS: VOYAGE POLICY TIME POLICY MIXED POLICIES VALUED POLICIES UNVALUED POLICIES OPEN POLICY FLOATING POLICY. Compiled by S. M.Gupta 41
  • 41. INLAND TRANSIT/ IMPORT & EXPORT IT CAN THEREFORE BE CONCLUDED THAT BESIDES OTHERS, THE MARINE INSURANCE REFERS BROADLY TO: TRANSPORTATION RISK INVOLVING: MARINE HULL AND MARINE CARGO. FURTHER, RISK ASSOCIATED WITH THE MARINE INSURANCE, AT DIFFERENT STAGES, WOULD BE DURING: INLAND TRANSIT OR IMPORT AND EXPORT. Compiled by S. M.Gupta 42
  • 42. COMMERCE/ TRADE MARINE INSURANCE IS MOST SIGNIFICANT INSURANCE IN: OVERSEAS COMMERCE AND DOMESTIC TRADE. IT PROVIDES INSURANCE PROTECTION AGAINST: FORTUITOUS LOSSES LIKE: ACCIDENT, FIRE, THEFT, BURGLARY AND ALSO NATURAL VAGARIES: WHILST THE GOODS ARE IN TRANSIT AND…. Compiled by S. M.Gupta 43
  • 43. MODE OF TRANSPORTATION THE GOODS MAY BE IN TRANSIT BY: RAIL ROAD AIR AND SEA. IT PROVIDES SECURITY FOR: VENTURING THE CAPITAL MORE FREELY, BY ALL CONCERNED AND EXPANDS THEIR AREA OF OPERATION. Compiled by S. M.Gupta 44
  • 44. World’s biggest truck ‘Midnight Rider Tractor Trailer Limousine’ Compiled by S. M.Gupta 45
  • 45. IMPORT AND EXPORT FOR IMPORT & EXPORT ‘INSTITUTE CARGO CLAUSES’ (ICC – ‘A’, ‘B’ OR ‘C’) ARE USED. THESE CLAUSES ARE FRAMED BY: ‘INSTITUTE OF LONDON UNDERWRITERS’ MOST OF THE COUNTRIES OF THE WORLD INCLUDING INDIA, ARE USING THESE CLAUSES. THE COVERAGE & THE EXCLUSIONS ARE EXPLAINED BY WAY OF INSTITUTE CARGO CLAUSES ATTACHED TO THE POLICIES. Compiled by S. M.Gupta 46
  • 46. INLAND TRANSIT FOR TRANSPORTATION WITHIN THE COUNTRY, THE CLAUSES USED ARE: ‘INLAND TRANSIT CLAUSES’ (ITC – ‘A’, ‘B’ OD ‘C’) WHICH ARE PREPARED BY: TARIFF ADVISORY COMMITTEE, ARE ATTACHED TO THE POLICY AND THE COVERAGE/ EXCLUSIONS ARE EXPLAINED BY WAY OF ‘INLAND TRANSIT CLAUSES’ ATTACHED TO THE POLICIES.Compiled by S. M.Gupta 47
  • 47. Compiled by S. M.Gupta 48
  • 48. Compiled by S. M.Gupta 49
  • 49. MOVEMENT OF CARGO ONCE THE GOODS MOVES OUT FROM THE WAREHOUSE OF THE SELLER TO THE WAREHOUSE OF THE BUYER THEY ARE NO LONGER IN THE CUSTODY OF THE SELLER OR THE BUYER THE GOODS ARE ENTIRELY IN THE HANDS OF OPERATORS OF THE SHIP AND THEREFORE LARGELY DEPENDENT UPON: FITNESS & SEA WORTHINESS OF THE SHIP COMPETENCE OF ALL CONCERNED (CREW MEMBERS ETC.) FOR SAFETY AND SOUND DELIVERY. Compiled by S. M.Gupta 50
  • 50. THE VOYAGE OR TRANSIT THE MARINE POLICIES ARE GENERALLY KNOWN AS ‘WAREHOUSE TO WAREHOUSE’, THEREFORE EACH AND EVERY STAGE OF TRANSIT IS IMPORTANT FOR PROPER UNDERWRITING I.E. CONDITIONS AT THE PORT OF ORIGIN/ DISCHARGE DISTANCE INVOLVED DIRECT OR BROKEN (INVOLVING TRANS- SHIPMENTS) PORTS OR LOCATIONS INVOLVED….. Compiled by S. M.Gupta 51
  • 51. THE VOYAGE OR TRANSIT LOADING/ UNLOADING AND OTHER FACILITIES THEREON PAST EXPERIENCES AT THOSE PORTS GENERAL CONDITIONS THERE I.E. OVER BUSY OR NORMAL WEATHER CONDITIONS CARGO STORED ON-DECK/ UNDER DECK CURRENT WORLD EVENTS I.E. POLITICAL TENSION CIVIL WARS LABOUR DISTURBANCES ETC. ETC. Compiled by S. M.Gupta 52
  • 52. Compiled by S. M.Gupta 53
  • 53. SPECIFIC VOYAGE POLICY UNDER THIS POLICY, THE SUBJECT MATTER IS INSURED AGAINST THE RISK OF A PARTICULAR VOYAGE I.E. FROM THE ‘WAREHOUSE OF THE CONSIGNER’ TO THE ‘WAREHOUSE OF THE CONSIGNEE’, FOR EXAMPLE: ‘WAREHOUSE OF CONSIGNER AT MUMBAI’ TO ‘WAREHOUSE OF THE CONSIGNEE AT NEW YORK’. THEREFORE: THE RISK COMMENCES FROM THE DEPARTURE OF GOODS FROM THE ‘WAREHOUSE’ NAMED IN THE POLICY AND TERMINATES ON ARRIVAL AT THE ‘WAREHOUSE’ NAMED IN THE POLICY. Compiled by S. M.Gupta 54
  • 54. SPECIFIC VOYAGE POLICY THIS POLICY COVERS THE SUBJECT MATTER IRRESPECTIVE OF THE TIME FACTOR THIS POLICY IS NOT SUITABLE FOR ‘HULL INSURANCE’ AS: A SHIP USUALLY DOES NOT OPERATE OVER A PARTICULAR ROUTE OR VOYAGE. THE POLICY IS USED MOSTLY IN CASE OF ‘CARGO INSURANCE’. Compiled by S. M.Gupta 55
  • 55. SPECIFIC VOYAGE POLICY TO SUM UP, THIS POLICY IS ISSUED FOR: A ‘SPECIFIC VOYAGE’ (ONE PLACE TO ANOTHER) PERIOD OF INSURANCE NOT VERY SIGNIFICANT HERE AND IS: SUITABLE FOR CLIENTS HAVING LIMITED NUMBER OF SENDING’S AND EXPIRES ON COMPLETION OF THE VOYAGE. Compiled by S. M.Gupta 56
  • 56. Compiled by S. M.Gupta 57
  • 57. OPEN POLICY AN ‘OPEN POLICY’ IS ALSO KNOWN AS ‘FLOATING POLICY’ IT IS ISSUED FOR A PERIOD OF TWELVE MONTHS AND ALL CONSIGNMENTS SENT DURING THE PERIOD ARE COVERED BY THE INSURER’S THIS POLICY IS SUITABLE FOR BIG COMPANIES THAT HAVE REGULAR SHIPMENTS IT SAVES THEM THE TEDIOUS AND EXPENSIVE PROCESS OF ACQUIRING AN INSURANCE POLICY FOR EACH SHIPMENT. Compiled by S. M.Gupta 58
  • 58. OPEN POLICY THE RATES ARE FIXED IN ADVANCE THE ASSURED HAS TO DECLARE THE NATURE OF EACH SHIPMENT AND THE COVER IS PROVIDED TO ALL THE SHIPMENTS THE ASSURED NEEDS TO DEPOSIT A PREMIUM FOR: THE ESTIMATED VALUE OF THE CONSIGNMENT DURING THE POLICY PERIOD. Compiled by S. M.Gupta 59
  • 59. DECLARATION EACH CONSIGNMENT NEEDS TO BE DECLARED ON EACH DECLARATION THE SUM INSURED GETS REDUCED ‘OPEN POLICY’ IS ISSUED FOR AGGREGATE VALUE OF: ANTICIPATED SHIPMENT DURING THE PERIOD OF INSURANCE. SUM INSURED SHALL NOT BE LESS THAN: SPECIFIED PERCENTAGE OF ANNUAL TURNOVER AND DEPENDING ON THE DISTANCE INVOLVED. Compiled by S. M.Gupta 60
  • 60. PREMIUM AS AND WHEN THE CONSIGNMENTS ARE SENT, THE DECLARATIONS ARE GIVEN TO THE INSURER’S THE SUM INSURED IS ADJUSTED ACCORDINGLY IF THE PREMIUM IS EXHAUSTED DURING THE YEAR ADDITIONAL PREMIUM IS CHARGED ON: THE RATES ALREADY AGREED UPON FALLING WHICH: THE POLICY STANDS TERMINATED. Compiled by S. M.Gupta 61
  • 61. CERTIFICATE/ POLICY A CERTIFICATE IS ISSUED AGAINST EACH DECLARATION THE CERTIFICATE OF INSURANCE IS: UNSTAMPED WHILST THE POLICY IS STAMPED. CLAUSES FOR COVERAGE I.E. ‘ITC’ – ‘A’, ‘B’ OR ‘C’, ARE ATTACHED TO THE POLICY. Compiled by S. M.Gupta 62
  • 62. INCREASE IN SUM INSURED THE SUM INSURED UNDER THE ‘OPEN POLICY’ CAN BE INCREASED: BEFORE THE POLICY IS EXHAUSTED OR AFTER THE PREMIUM PAID IS EXHAUSTED. BALANCE PREMIUM IF ANY UNDER THE POLICY IS REFUNDED TO THE INSURED ‘OPEN POLICIES’ ARE GENERALLY ISSUED FOR ‘INLAND TRANSIT’. Compiled by S. M.Gupta 63
  • 63. ADVANTAGES ADVANTAGES OF ‘OPEN POLICY’: AUTOMATIC AND CONTINUOUS INSURANCE PROTECTION SAVING IN ADMINISTRATIVE EXPENSES SAVING IN STAMP DUTY VIS A VIS: ‘SPECIFIC POLICIES’ BEING ISSUED FOR EACH AND EVERY DECLARATION AND STAMP DUTY IS CHARGED EVERY TIME. Compiled by S. M.Gupta 64
  • 64. Compiled by S. M.Gupta 65
  • 65. OPEN COVER ‘OPEN COVER’ GIVES THE INSURED AN AUTOMATIC AND CONTINUOUS INSURANCE PROTECTION SO THAT THERE IS NO RISK OF: ANY SHIPMENT REMAINING UNINSURED/ UNCOVERED EVEN THROUGH AN OVERSIGHT. THE RATES AND TERMS AND CONDITIONS ARE AGREED IN ADVANCE ‘OPEN COVER’ IS VALID FOR ONE YEAR. Compiled by S. M.Gupta 66
  • 66. OPEN COVER IT IS OBLIGATORY ON THE PART OF THE INSURED TO DECLARE: EACH AND EVERY SHIPMENT WITHOUT FAIL AND NO ATTEMPT SHOULD BE MADE TO: WITHHOLD ANY DECLARATION TO SAVE PREMIUM. AN ‘OPEN COVER’ IS NOT A POLICY BUT IS AN AGREEMENT BINDING IN HONOUR. THE INSURER WOULD INSURE ALL SHIPMENTS AND THE INSURED SIMILARLY BOUND TO DECLARE EACH SHIPMENT. Compiled by S. M.Gupta 67
  • 67. OPEN COVER AS PER THE PROVISIONS OF THE ‘INSURANCE ACT’, THE PREMIUM FOR THE RISKS HAS TO BE PAID IN ADVANCE AND THEREFORE: THE PREMIUM IS REQUIRED TO BE PAID ON EACH AND EVERY DECLARATION. ‘OPEN COVER’ IS SUITABLE FOR PERSONS ENGAGED IN: REGULAR IMPORTS AND EXPORTS AND SEPARATE POLICY IS ISSUED FOR EACH SHIPMENT.S. M.Gupta Compiled by 68
  • 68. Compiled by S. M.Gupta 69
  • 69. Compiled by S. M.Gupta 70
  • 70. Compiled by S. M.Gupta 71
  • 71. Compiled by S. M.Gupta 72
  • 72. DUTY INSURANCE THIS INSURANCE IS ON INCREASED VALUE OF CARGO, BY REASON OF PAYMENT OF CUSTOM DUTY AT DESTINATION IT IS SUBJECT TO SAME CLAUSES AND CONDITIONS AS THE INSURANCE OF CARGO AND PAYS THE SAME PERCENTAGE OF LOSS AS MAY BE PAID THEREON, HOWEVER: EXCLUDING CLAIM IN RESPECT OF: TOTAL LOSS OF WHOLE OR PART OF CARGO PRIOR TO DUTY BECOMING PAYABLE. Compiled by S. M.Gupta 73
  • 73. INCREASED VALUE INSURANCE THIS INSURANCE IS ON INCREASE VALUE BY REASON OF MARKET VALUE OF THE GOODS AT DESTINATION ON THE DATE OF LANDING IS HIGHER THAN THE VALUE OF CARGO INSURED THE TERMS AND CONDITIONS ARE SAME AS THAT OF THE ORIGINAL POLICY, HOWEVER: THE INSURER’S PAYS 75% OF THE VALUE & THE ASSURED HAS TO BEAR 25% OF THE CLAIM AMOUNT. Compiled by S. M.Gupta 74
  • 74. SPECIAL DECLARATION POLICY IT IS A FORM OF ‘OPEN POLICY’ OR ‘FLOATING POLICY’ ISSUED TO CLIENT WHO HAVE A LARGE TURNOVER AND FREQUENT DISPATCHES OF GOODS ANY WHERE WITHIN THE COUNTRY BY: RAIL, ROAD OR INLAND WATERWAYS. THE POLICY IS ISSUED TO THE CLIENTS, WHOSE ESTIMATED ANNUAL DISPATCHES ARE FOR AT LEAST 2 CRS. Compiled by S. M.Gupta 75
  • 75. ANNUAL POLICY ‘ANNUAL POLICY’ UNDER THE MARINE DEPARTMENT IS ISSUED FOR: 12 MONTHS TO COVER GOODS BELONGING TO: THE ASSURED OR HELD IN TRUST BY THE ASSURED BUT: NOT UNDER CONTRACT OF SALE OR PURCHASE PROVIDED….. Compiled by S. M.Gupta 76
  • 76. ANNUAL POLICY SUCH GOODS ARE IN TRANSIT BY RAIL OR ROAD FROM: SPECIFIED DEPOTS/ PROCESSING UNITS TO OTHER SPECIFIED DEPOTS/ PROCESSING UNITS, HOWEVER: THE DEPOTS/ PROCESSING UNITS MUST BE OWNED OR HIRED BY THE ASSURED. THE POLICY IS NOT ASSIGNABLE OR TRANSFERABLE. Compiled by S. M.Gupta 77
  • 77. SPECIAL STORAGE RISK POLICY (SSRI) THE COVER UNDER ‘SPECIAL STORAGE RISK POLICY’ POLICY TAKES INTO CONSIDERATION: THE REQUIREMENT OF THE CONSIGNER OF THE GOODS FOR INSURANCE TO PROTECT HIS GOODS DURING STORAGE AT: RAILWAY YARD OR CARRIER PREMISES. Compiled by S. M.Gupta 78
  • 78. SPECIAL STORAGE RISK POLICY (SSRI) PENDING CLEARANCE BY THE CONSIGNEES ON TERMINATION OF COVER (7 DAYS) UNDER ‘OPEN POLICY’ OR ‘SPECIAL DECLARATION POLICY’ (SDP), HOWEVER: THE COVER IS GRANTED IN CONJUNCTION WITH ‘OPEN POLICY’ OR ‘SDP’ COVERING TRANSIT OF GOODS BY RAIL OR ROAD. Compiled by S. M.Gupta 79
  • 79. KINDS OF MARINE LOSSES DIFFERENT TYPES OF MARINE LOSSES Compiled by S. M.Gupta 80
  • 80. Compiled by S. M.Gupta 81
  • 81. Compiled by S. M.Gupta 82
  • 82. Compiled by S. M.Gupta 83
  • 83. THANKS ANY QUESTIONS? Compiled by S. M.Gupta 84